George Simitopoulos suggests that one of the first places that you want to start where you are shopping around for car finance is looking for something that is in your league, and I mean an affordable deal by that.
After that is when you start your real homework, and here are some steps that can help you along the way to find yourself a good deal.
How Good Is Your Credit Score
If you are looking forthe best rates offered by lenders, then you may want to check if you qualify for it by knowing your credit scores. Once you have your credit score checked it becomes easier for you to gauge whether or not these lucrative interest rates are applicable. Credit Unions by law are required to give you one free report a year to check on your credit worthiness.
Find our yours atTransUnion.
Loan lenders may check any of the standard credit reports, so familiarizing yourself with the same should give you some time to correct mistakes, if any. If you have a flawless credit history you can shop around and get a low interest rate from lenders.
How Long Is Your Repayment Term
The interest rate on short-term loans is much lower, despite the fact that they are accompanied by higher monthly payments. It certainly seems tempting to choose a car financing deal that involves lesser monthly payments, but this also means you will be in debt for a longer time.
This may also increase the overall costs in the long run. No doubt, you have car financing deals that run for five to eight years, up on offer today. However, the interest rates on these loans are seen to be high in many cases too. Try cutting down your loan length as much as you can, if you are looking to make savings in the bigger picture.
How Big Is Your Deposit
If you have a good credit score, chances are the bank may not even ask you to put any money down at the time of taking out the loan. This doesn’t mean that you should not be thinking about a deposit.
For instance, say you got your car financedwithout a deposit, thanks to your clean credit score. Then, say, you decide to sell your car months later. You will find yourself in a sticky situation here, as you cannot sell the car if the amount you owe on it exceeds the trade value of the car.
On the other hand, if you have put down a deposit, you will find yourself with a lower amount you’re taking out as the loan, and the price you sell your car for more than covers that.So rather save up for a 25-35% deposit and use public transport for a while longer.
While you are on it, you may also want to look at furnishing the other charges such as any taxes, optional extrasor and extended warranty upfront, rather than adding it onto your loan.
If you’re shopping around for finance for your next car, click here to find out if you qualify for finance.